Article published Monday, August 17, 2009, at Fox News.

Why Are Democrats Pretending They're Fighting Giant Insurance Companies?

By John R. Lott, Jr.

Democrats are fighting the greedy medical insurance and pharmaceutical companies to provide Americans health care, right? Surely anyone who listened to President Obama talk last week in Portsmouth, New Hampshire last Tuesday would think that. But while the Democrats are calling these companies evil for wanting to prevent the government takeover of health care, Democrats are working closely with these very same companies to support President Obama's health care plan. In fact, in exchange for favorable treatment in the health care plan, these companies are financing a massive ad campaign to support it.

Referring to insurance companies, House Speaker Nancy Pelosi claimed at the end of July: "They are the villains. They have been part of the problem in a major way. They are doing everything in their power to stop a public option from happening." She and other Democrats clearly know this is false. Just two weeks before Ms. Pelosi's rant against the insurance companies, Iowa Democrat Senator Tom Harkin announced on July 16: "The insurance industry wants reform. Heck, even Harry and Louise are demanding reforms."

Attacks on insurance companies have also become a standard part of President Obama's health care talks. During his town hall meeting in Portsmouth, Obama went after both pharmaceutical and insurance companies many times, saying "we don't want to subsidize the drug companies" and called for ending what he claimed were "insurance [company] subsidies." Similarly, at a press conference on July 22, Mr. Obama warned: "you know, there had been reports just over the last couple of days of insurance companies making record profits. Right now, at the time when everybody's getting hammered, they're making record profits and premiums are going up." With attacks such as this, who would have guessed that these greedy insurance companies are the same ones that Democrats are proposing get paid to administer the new government health care system and that the large insurance companies support this?

According to FOX News, the dreaded pharmaceutical companies are apparently ready to spend at least $150 million, and possibly as much as $200 million, to push the health care changes President Obama wants. Private insurance companies, who launched the famous Harry and Louise ads that were deemed so important in defeating the Clinton takeover of the health care industry in the 1990s, have now launched similar ads with the opposite message supporting President Obama. These pharmaceutical and insurance ad campaigns are just beginning, and FOX News reports these ad campaigns will dwarf campaigns bankrolled by the opposition designed to derail Obama's plans.

When polls started showing declining support for the president's plan, Democrats needed a bogeyman -- even if it was one of their allies. Democrats are using the distrust felt by some Americans towards health care companies, particularly the insurance companies, to sell the government's takeover of health care.

Let's face it, big business don't care about capitalism, each firm only cares about its profits. If getting in bed with government guarantees them profits, that's fine with them. The Democrats, though, should be honest about what they are doing. Their claims about these companies' opposition is as inaccurate as what they claim is in the health care bills.

*John Lott is an economist and author of Freedomnomics.

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